NNPC yet to explain missing billions, NEITI says

14 March 2018, Sweetcrude, Abuja – The Nigeria Extractive Industries Transparency Initiative (NEITI) has said even though financial accountability has improved in the nation’s oil and gas industry, the Nigerian National Petroleum Corporation (NNPC) still has not explained billions of dollars of missing revenue.

Executive Secretary of NEITI, Mr. Waziri Adio, who stated this in an interview with Bloomberg, said while energy producers have cooperated and complied with requirements to publish payments, the watchdog agency has struggled with the state-owned oil firm’s wanton non-disclosures.

According to Adio, the NNPC has not explained what it did with at least $22.7 billion earned from the sale of oil licences and in dividends from its stake in the Nigeria Liquefied Natural Gas (NLNG) Company over a 15-year period.

“The sector is no longer the black hole that it once was, but we could still use more transparency. Things are opening up. There could be more in the area of contracts, ownership and expenditure transparency, but definitely there is some progress,” Adio said.

The company has said in the past it has the authority of the government in its actions.

Royal Dutch Shell, ExxonMobil Corporation, Chevron Corporation, Total and Eni operate joint ventures with the state oil company that account for about 90 per cent of the output of Nigeria, Africa’s top producer.

NEITI was set up in 2004 after Nigeria acceded to the Extractive Industries Transparency Initiative, which requires international energy companies and governments involved in mining to publish all their payments.
Nigeria LNG is owned 49 per cent by NNPC, 25.6 per cent by Shell, 15 per cent by Total and 10.4 per cent by Eni.

President Muhammadu Buhari, who pledged during his 2015 election campaign to fight widespread graft in the oil and gas industry, appointed Adio in February 2016 to head NEITI.

For all its work in auditing oil industry payments, critics have said the agency remains toothless, lacking the power to compel companies to disclose payments or penalise erring producers.

In its defence, Adio said NEITI’s annual audits have helped the government recover billions of dollars that would have been lost.

“The NEITI law does not give us the power to compel compliance or to enforce our recommendations,” he said. “But we have done our reports, with findings and recommendations, and we have shared them with government.”

So far, the agency has produced reports covering the years from 1999 to 2015 and is working on those for 2016 and 2017, which are scheduled for public presentation in July and November.

Before the end of this year, NEITI plans “to automate our data collection process and be able to provide real-time data and real-time analysis,” Adio said.